Rather than striving to cut costs and regain financial sustainability, North America’s biggest auto company will use its newfound taxpayer-funded slush fund to offer loans at below-market interest rates – as low as 0% in some cases. So even if you can’t afford a new car, GM will bend over backwards to make sure you get one…

It all sounds eerily similar to what subprime mortgage brokers were doing a few years ago. And once again, governments (both U.S. and Canadian) are pumping money into the system to encourage it.

Now, with a stronger minority government (143 seats), Harper is doing more of the same, claiming that “unfettered capitalism” is the cause, and more international government the solution, of the current global financial crisis.

Does he really believe this? I prefer to think not (especially given that I voted for the guy). But he’s going along with the crowd of misguided European leaders who believe that “laissez faire is finished,” and the public will be better protected by more government intervention in financial markets.

Austrian economists, who have been predicting a major economic correction for some time now, know that it is over-regulation of the macroeconomic sphere that has caused most of the financial problems of the last 100 years. They know that when government inflates the money supply and suppresses interest rates, people will borrow more, save less, and make unwise investments that they can’t really afford.

The naïve (and somewhat socialist) idea that everybody “deserves” to own a home regardless of their financial situation, and that government has some natural power to print money out of thin air to help them achieve this end, is a recipe for recession.

And yet, politicians continue to pretend that they can solve the problem with bigger government and more regulation, not to mention foolish and unsustainable bank bailouts.

Too bad we don’t have a political party in Canada that will stand up for economic reality.

American taxpayers were skeptical, but Congress finally caved in to partisan pressures on Friday and passed the bailout bill. Today’s result suggests that the main argument used to justify such a move (a return to market stability) might have convinced Congress, but has failed to convince the market itself. (The Dow Jones Industrial Average closed almost 370 points lower today.)

The reality is that investors are smarter than politicians. They understand free market economics, and they understand that big government can’t solve economic problems.

I expect that many investors were hoping for a post-bailout surge in the markets, allowing them to regain lost ground, sell out quietly, and break even on their investments. But that’s not how markets work. So long as intelligent investors are playing the market, its value will reflect all information that is known by said investors.

Congressman Ron Paul argued on Friday that the bailout plan would only prolong the upcoming recession, while continuing to overextend an unsustainable credit-based economy at the expense of taxpayers. Paul blames the Federal Reserve and its manipulation of interest rates for the current crisis, and believes that the only way out of this mess is a painful free market correction (the sooner the better)…

Today’s response to the bailout (by intelligent investors) only demonstrates that Ron Paul is right.

You needn’t be an expert in high finance to recognize that this is a bad deal for the American people. The U.S. government is already more than $9 trillion in debt, and now its buying an 80% share in a company that can’t keep its own head above water. The only way to pay for such an “investment” is to borrow more money (primarily from foreign sources), or to print more money out of thin air, further reducing the value of the U.S. dollar and hitting citizens even harder with the inflation tax.

And yet, Wall Street is grateful to its federal government for this seemingly “free” cash infusion.

“Thank God,” exclaimed Loomis, Sayles & Co bond manager, Daniel Fuss. “AIG is interwoven with so many people and touches many companies around the world. This is a huge relief to many parts of the financial markets.”

But government is not God. Government does not create or produce resources or capital. In fact, it must fork out taxpayers’ money to pay for the paper on which U.S. Dollars are printed.

Every time the government issues a corporate welfare cheque or bails out a struggling company, it is only delaying the inevitable economic correction. Borrowing money on behalf the American people so as to bail out corporations does not solve the problem, it only collectivizes it, punishing those who make shrewd business decisions.

Businesses that make greedy and stupid business decisions should pay for those decisions and be purged from the marketplace, rather than expecting taxpayers (especially taxpayers in future generations) to shoulder the debt.

John Maynard Keynes’ economic theories didn’t prevent the second half of the Great Depression. They only delayed it.

Alberta came out on top of the study, which measured employment growth, productivity, unemployment, and other factors in each U.S. state and Canadian province. Saskatchewan scored the tenth place overall, while BC came in twelfth. No other Canadian province made the top-30.

“If we actually improved the characteristics of labour markets we would be among the top performing labour markets in North America,” explained the Fraser Institute’s director of fiscal studies, Niels Veldhuis, who credits the three western provinces’ booming economies for their current strong performance. “We would probably be No. 1. And that’s the message here for B.C., that we can be even better than what we have been in the last five years if we improve some of our characteristics.”

This could mean relaxing labour laws, reducing the percentage of employees working in the public sector, and reducing the minimum wage in relation to the average wage, Veldhuis said.

“All of these things have been shown by academic research to have negative impacts on labour markets,” he said, giving Alberta as an example of a free market leader. “They have lower unionization, they have less public-sector employment, they certainly have a much lower minimum wage relative to the average wage, and they have more balanced labour-relations laws.”

Although this cause is a pretty safe bet for winning public support, it reeks of unwanted government intervention in the economy, not to mention the fact that it lacks all logical purpose.

If you ban ATM service fees, the banks will either be forced to stop providing after-hours automated service, or levy another fee (or two) somewhere else. And much as we like to bitch and bicker about ATM service charges, at least they can be avoided, which might not be the case for whatever would take their place.

Personally, I could probably count on one hand the number of times I’ve paid an ATM user fee, since I always plan ahead and make use of my own bank’s facilities. I also choose to keep the minimum balance on hand so as to avoid monthly account charges. In fact, aside from the cost of printing cheques, I can’t remember the last time CIBC got a dime of my money.

If you want the convenience of visiting any bank machine in town, that’s fine. Just remember that the banks can and will ask you to pay for it, and there’s no reason why politicians should be expecting anything else.

“We’ve called (it) the peanut butter approach,” explained Glen Hodgson, economist and co-author of the report’s 144-page first installment. “You kind of spread it smoothly across the land, even though you could get greater benefits if you found a way to concentrate in particular areas.”

As a country, Canada needs to invest its resources more efficiently, the report argues, especially in relation to the education and training of highly skilled workers.

The report also discusses regional distribution of resources, criticizing the current system of equalization payments and funding for cities, which it says penalizes growth.

Equality “might be part of the culture, but look at the practice,” Hodgson said.

“Here, as elsewhere, Canada will have to abandon a cherished myth of equal treatment for all its institutions,” social scientist Janice Gross Stein reminds us in the forward to the Conference Board report.

What these people seem to be saying is that, although the principle of “equality” looks good in theory, there are some situations where it simply doesn’t work, and shouldn’t get in the way of practicality, efficiency, and fairness. This type of objective reasoning can be applied economically on a great number of levels, and shouldn’t be dismissed too easily in any genuine capitalist society.

Filed in the U.S. District Court for the Central District of California, the suit alleges that the new phone’s name “constitutes false designation of origin, unfair competition and trademark dilution.” RIM is using this to seek an injunction against the sale of BlackJack devices in the United States.

It is true that the RIM and Samsung devices are targeting nearly identical markets, with both the BlackJack and BlackBerry Pearl featuring wireless email capability and built-in QWERTY keyboards. Both are offered exclusively by Cingular Wireless in the United States.

Despite the striking similarities, however, it’s very difficult to see how any one company’s trademark can extend to cover the word “black.” Both of the devices are primarily black in color after all, and I can honestly say that I didn’t draw any connections to the BlackBerry brand name upon hearing about the BlackJack’s release.

All things considered, I can’t see how RIM really expects to win this lawsuit. It seems more like an attempt to establish their brand superiority complex, and assert a “we were here first” kind of message than to pose a serious legal threat to Samsung.

Don’t get me wrong; BlackBerry is perhaps one of the most iconic brands in the world, and represents a great family of products, but there comes a time to draw the line between brand protection and immature paranoia.

Originally published at TeleClick.ca.

As a whole, web advertising currently accounts of about 6% of all media spending, and is expected to reach 8% sometime in 2008, overtaking radio promotion.

“It’s one thing for Internet ad spending to surpass relatively minor media such as outdoor or Yellow Pages, but it’s quite another thing to blow past radio, one of the big four traditional media,” commented eMarketer analyst David Hallerman on the current trend.

Web-based advertising has continued growing despite a number of tough challenges, including clickfraud, and seems destined to become the next great nexus of media spending.

Trusts have long been exempt from normal corporate tax laws, allowing them to pay out larger dividends to investors than other publicly traded companies. In short, they are… sorry, were… a good option for the mid-risk income-oriented investor looking for a steady flow of cash from their investment holdings.

Although one could argue that the tax benefits of income trusts have been, on occasion, abused by big corporations, the fact remains that these investment vehicles have become an important component in the Canadian investment economy, upon which many people rely for regular income.

That’s why I was a little taken aback when Stephen Harper’s Conservative government, made the sudden decision to impose heavy taxes on trusts, effectively rendering them obsolete for tax purposes. In the closely fought election battle earlier this year, the Conservatives promised quite clearly that they would not be taking this move, and that investors had nothing to worry about.

By doing a complete 180 on this issue, however, (and gaining the all-to-eager support of some minority parties in parliament), the federal government has betrayed the trust of Canadian investors, after wooing them into a false sense of security.

The government claims that income trusts are “damaging” the Canadian economy. If this is the case, however, why did Harper promise to protect such a dangerous and frightening type of investment in the first place?

Personally, I came very close to purchasing an income trust just a few days ago, but ended up opting for a (safe) mutual fund instead. Had I gone the trust route, I would have lost a significant percentage of my portfolio, as many Canadians did.

Although this issue isn’t quite enough to make me want to vote Liberal, it does cause me to seriously question the Conservative government’s economic policies. Overall, this was a very scummy and underhanded course of action that voters won’t be forgetting about anytime soon.